Hanging By A Finger

This is entirely a Chinese problem. The US has not influenced the Chinese housing market in any way. Speculators have been clearing older apartment buildings and to some extent hutongs and villages. Then they have built 20-30 story buildings, using tons of re-bar and steel. The buildings being replaced used significantly less re-bar. The money for construction has been borrowed.

Owners have stubbornly refused to reduce prices even when affordable inventory has been far beyond demand. Many buildings have dark windows at night when the streets are busy. But no one is going home to these places. Now, the market is finally forced to adjust and the huge loans cannot be forgiven as readily as they have been in the past.

This is going to hurt the Chinese economy and it doesn't do a thing to help the US. Russia is in the same or worse condition. The US doesn't have the money to be the 'master of the world'. We're all going to be dealing with the pain for years to come.

It's a good time to turn to God. Jesus warned us that the rich will drag the indebted into court. But he advised us to pray for our daily bread and forgive our debtors.

This is one of the results from the US made crisis. The crisis is of strategic importance to the US because it has effectively brought down China without the US having to wage a war against China. While the US can bail out its economic problems, China will be in real trouble. The US will then be facing just Russia which it has the full confidence to win and be the "master of the world" as the whole world faces the economic meltdown. The only thing that the US has to do is to protect the dollar, its main weapon both for attack and defence.